Change Order 101

Change Order 101

When you are undertaking a custom home build, most choices are made before the first bucket load of earth is moved or hammer ever meets nail. Once your project is underway, though, that doesn’t mean you’re off the decision-making hook! You may need or want to make adjustments, known as change orders, as your home is under construction. How do change orders work?

What You Should Know About Custom Home Build Change Orders

A change order during the construction process will create delays (which may be minor… or they may not be!) and can add to your cost. Again, some of the changes in budget may be minor. Others can mean a significant increase. This is why it is important to work with your custom home builder and communicate clearly; the goal is to minimize change orders, so your project runs smoothly and on-budget.

There are “discretionary” changes. That is, the change orders are instigated by you, as the homeowner. They’re mostly aesthetic adjustments or related to convenience. As you see your house come to life, for example, you may want to:

• Upgrade the quality of your windows.
• Add tile to your entryway.
• Change the style of your kitchen cabinets.
• Install extra light fixtures in several rooms.

There are also “non-discretionary” changes. For example, you may need to:

• Fireproof your laundry room.
• Install a new water line from the street so you have sufficient capacity for fire sprinklers.
• Excavate a few more feet for foundation improvements.

Some non-discretionary changes are outside of the control of you or your builder; there may be issues that couldn’t have been anticipated. But – these should be the (very rare) exception rather than the rule.

An experienced builder works conscientiously to ensure that they cross their t’s and dot their i’s so the “big” issues – water, electric, foundation, permitting, etc. – are taken care of before you break ground. If an engineer or designer misses something, your builder should be able to spot the error well before it costs you time and money.

The Change Order Process

You want to finalize as many details as you can before construction starts. As mentioned, (and it bears repeating!) this will save you time and money – not to mention stress and aggravation. But if you do need to change an element, don’t be afraid. Work with your builder; they are there to build your dream home. If something isn’t right, speak up.

During the initial stages of your relationship with your builder, ask about the change order process so you know how to approach it. With great communication, you can minimize change orders, and if you cannot avoid them altogether, you can mitigate the impacts on your budget and timeline.

While the process will vary, it generally looks like this:

• Change order point of contact. Requests for changes are handled by one person. This streamlines communications between you, your contractor, suppliers, site managers, project managers, etc. Go through this person rather than approaching a contractor or subcontractor directly.
• Documentation. Your request is recorded on a change order form, either in writing or digitally. This ensures accuracy and, again, facilitates better communication.
• Terms of the change. Your builder will inform you of the cost and time to make the change as quickly as possible. This allows you to make a decision: go ahead with the adjustment or veto it.
• Confirmation. This is your home; nothing happens until you give the go-ahead. You will approve the terms and other change details.
• Inspection. Your builder may request that you visit your home site to ensure you are fully informed and satisfied as the change is being made.
• Payment. Change orders may be billed out separately. You may have to pay a portion upfront, depending on the nature of the order.

Change orders inevitably have an impact on your budget and project timeline. Your builder will work to minimize the need for these changes by being proactive and keeping the lines of communication open.

That said, this is your forever home, and it should be built for the life you want to live. Getting it right is important. Don’t be afraid to request changes and make sure you fully understand the terms. Sometimes, it’s a quick and simple matter – and it’ll make all the difference to you in the end.